AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN
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AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN
Republic Act No. 9505
August 22, 2008
Case Overview and Summary
Summary of the Personal Equity and Retirement Account (PERA) Act of 2008Establishment and Contributions
- A Contributor can create and maintain a maximum of 5 PERA at any time, with only 1 Administrator for all PERA. (Section 4)
- Maximum annual contribution is ₱100,000 or equivalent foreign currency. If married, each spouse can contribute ₱100,000. Overseas Filipinos can contribute double the amount. (Section 5)
- Employers can contribute to employee's PERA up to the allowable amount for the employee. (Section 6)
Tax Treatment
- Contributor gets 5% tax credit on total PERA contribution, but no refund of the credit. (Section 8)
- All income from PERA investments is tax-exempt. (Section 9)
- All qualified distributions are tax-exempt. (Section 10)
Distributions and Withdrawals
- Distributions allowed at age 55, after 5 years of contributions, as lump sum or pension. (Section 12)
- Complete distribution upon Contributor's death, regardless of age. (Section 12)
- Early withdrawals subject to penalty determined by Secretary of Finance, at least equal to tax incentives enjoyed. Exceptions for hospitalization over 30 days and permanent disability. (Section 13)
Other Provisions
- PERA assets are separate from Administrator/Custodian assets and cannot be assigned, alienated, or subject to insolvency/estate taxes. (Sections 7, 14)
- Rules and regulations to be established by DOF, BIR, and regulatory authorities on various aspects of PERA. (Section 15)
- Penalties for violations by Administrators, Custodians, or Investment Managers. (Sections 17, 18)
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AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN
Republic Act No. 9505
•August 22, 2008
Republic of the Philippines
Congress of the Philippines
Metro Manila
Fourteenth CongressFirst Regular Session
Begun and held in Metro Manila, on Monday, the twenty-third day of July, two thousand seven.
Republic Act No. 9505             August 22, 2008
AN ACT ESTABLISHING A PROVIDENT PERSONAL SAVINGS PLAN, KNOWN AS THE PERSONAL EQUITY AND RETIREMENT ACCOUNT (PERA)
Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled::
SECTION 1. Title. - This Act shall be known as the "Personal Equity and Retirement Account (PERA) Act of 2008".
SEC. 2. Declaration of Policy. - It is declared the policy of the State to promote capital market development and savings mobilization by establishing a legal and regulatory framework of retirement plans for persons, comprised of voluntary personal savings and investments. The State recognizes the potential contribution of PERA to long-term fiscal sustainability through the, provision of long-term financing and reduction of social pension benefits.
SEC. 3. Definition of Terms. -Unless the context requires otherwise, the following terms shall...
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